Weekly Report - 30 March 2004

COLOMBIA | Remittances on the rise. Over the past four years, remittances by Colombian expatriates have more than doubled, to just under US$3bn; measured as a share of GDP, they have increased from 1.5% to 3.9%. This is still below Ecuador's 5.9%, but is considerably more than Mexico's 2.6%.

Remittances have become a major source of hard currency; last year they were equivalent to 90% of Colombia's oil earnings, almost twice those from coal, and 3.7 times those from coffee. The US is the main source of remittances, but it accounts for only a little more than half, since the Colombian diaspora is spread more widely than those of Mexico or Central America.

BOLIVIA | Argentina returns as gas buyer. Argentina's current energy crisis, most acute in the gas sector, has translated into a welcome increase in demand for Bolivian gas. Between 1972 and 1999 Argentina used to buy from Bolivia up to 6m cubic metres of gas a day. The volume later shrank to a trickle as Argentina brought online huge fields of its own.

From May the flow will increase by 4m cmd. Construction of a new US$1bn pipeline is due to begin in June, which should be pumping about 10m cmd by 2006.

PERU | Key tax trimmed, threatened further. The tax on financial transaction, on which the government relied to raise US$1.5bn over the coming three years, has just had its rate trimmed by a third, from 0.15% to 0.10%. Business associations are collecting signatures for a petition to the constitutional court to have the tax declared unconstitutional.